Terms of ReferenceTransaction Advisory Services for

Public-Private Partnerships in Industrial Zone Development and Revitalization

I- Introduction

The Government of the United States of America, via the Millennium Challenge Corporation (MCC), and the Government of Morocco (GoM) have signed a Compact (Compact) totalling $450 million to support a five year program with the objective of poverty reduction through economic growth in Morocco. The program will be overseen by MCA-Morocco, an entity to be created by the GoM for the duration of the Compact, for the purpose of implementing the program1. The five year timeline for the program will begin at Entry into Force of the Compact, which is expected in late 2016.

The Morocco Compact is composed of two projects: "Education and Training for Employability" and "Land Productivity." The "Land Productivity" Project is made up of three activities: "Governance", "Rural Land" and "Industrial Land". Building on work already undertaken by the GoM, the Governance Activity aims to support the development and implementation of a National Land Strategy to address land governance and land market constraints to investment and productivity. The Rural and Industrial Land activities complement the Governance Activity by developing and implementing models that will address the constraints to productivity of rural and industrial land. They will also support the Governance Activity with reforms of relevant legal and institutional frameworks specific to those sectors.

This consultant will provide transaction advisory services to MCA-Morocco in support of the Industrial Land Activity.

During the development of the Compact, MCC retained Deloitte Financial Advisory Services LLP and Antea Group, an environmental consulting firm, as due diligence consultants on the Industrial Activity. Excerpts of Deloitte’s final deliverables may be requested by potential bidders to provide additional background information on the Industrial Land Activity and the sites proposed for the transactions described in more detail below.

II - Background

General Background: According to an analysis of Morocco’s constraints to economic growth conducted by the GoM and MCC, more than 40 percent of domestic enterprises in Morocco view access to land as a major obstacle. This is despite significant investment by the GoM since the 1970s in the development of more than 100 industrial zones across the country. However, these zones have not been completely successful in meeting firms’ needs for industrial land. One indication of this is that according to GoM estimates, approximately 50% of land in existing zones is unused, either because it is unsold or the owner has not invested. Further, for enterprises that do locate in zones, infrastructure is often deteriorated and services typically associated with industrial zones, such as basic zone management and maintenance, business permitting and training facilities, are rarely offered to enterprises in the zone. Most of these zones are also suffering from poor environmental and social performance.

1 MCA-Morocco intends to apply a portion of the MCC Funding to eligible payments under a contract for which this Terms of Reference is issued. Any payments made under the proposed contract will be subject, in all respects, to the terms and conditions of the Compact and related documents, including restrictions on the use of MCC funding and conditions to the disbursements of MCC funding. No party other than the Government, MCA-Morocco and MCC shall derive any rights from the Compact or have any claim to the proceeds of MCC Funding.

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Objective: The Industrial Land Activity aims to introduce systematic changes in the way that the GoM develops and manages industrial land. Specifically, it will demonstrate a model for development of industrial zones that identifies land based on confirmed market demand to optimize economic and financial viability as well as social responsibility and enviromental sustainability. This model will use a public private partnership approach to leverage public sector investment with private sector investment and expertise in revitalization and expansion of existing zones, development of new zones and ongoing management and maintenance of zones.

Activity Components: To achieve this objective, the Activity will have two main Components:

Component 1: The first major component is the creation of a Center of Expertise for Industrial Land Development (CEILD) with three primary purposes: (i) to act as a center for technical expertise and knowledge management for industrial land development and transactions, providing good practices and standards for the development of zones in Morocco; (ii) to provide technical assistance and capacity building to the Ministry of Industry, Trade, Investment and the Digital Economy (Ministere de l'Industrie, du Commerce, de l'Investissement et de l'Economie numérique - MICIEN) and other actors in support of the development of market-driven and sustainable industrial zones that meet the needs of industrial firms; and (iii) to support and oversee implementation of the Industrial Land Activity, including the demonstration projects to be completed as part of Component 2.

Some of the specific activities of the CEILD will include assisting the MICIEN in the: Development of national demand studies for industrial land and a long term strategy for planning

of industrial zones. Creation of a database of industrial land that will provide an effective link between offerors of

industrial land and those seeking industrial land and will include information about industrial land, including economic, gender, social and environmental data such as types of industries, population size, labor availability, training institutions).

Development of a new law on industrial zones.The activities of the CEILD will also include:

Capacity building of the MICIEN, as well as other stakeholders, including Ministries, local authorities and private sector actors, on best practices in zone development and the optimization of public and private sectors’ roles in zone development and operation.

Dissemination of national and international best practices in the development of sustainable industrial zones that takes into account successful experiences with PPPs, and the application of the highest environmental and gender and social inclusion standards.

Identification and development of tools and mechanisms to ensure that industrial land is developed by enterprises for industrial purposes within a reasonable timeframe and that unutilized land in existing sites is either developed or can be recovered and put to productive use.

Oversee the demonstration zones funded by the Compact to ensure that the model is demonstrated effectively and is replicable.

As feasible, the CEILD will provide technical support to prioritized projects from other stakeholders that are selected based on established performance/qualification criteria.

The CEILD will be a unit within MCA-Morocco during the period of the MCC Compact and will coordinate closely with MICIEN. MCA-Morocco and the CEILD are expected to be have key hires in place by summer 2016.

Component 2: The second major component is implementation of Industrial Zone Demonstration Projects that will test the project’s industrial zone models and approaches. Under this component, demonstration projects for both revitalized and new zones will be prepared, brought to market, and, to the extent necessary to attract private investment, financed by the public sector (i.e., Compact and GoM funds). In

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the case of revitalization, the work will focus on existing industrial zones in Morocco that require some upgrading of infrastructure, a new framework for management and maintenance of the zone, and contain existing unutilized land. Revitalization projects will also include expansion of the zones. New zones will be greenfield projects on land made available by the GoM. This component will also include a competitive fund to provide financing for zones, other than the demonstration zones, that are developed utilizing a market-driven approach and are selected through an open competitive process.

A transactional entity or unit could be created to serve as the instrument through which transactions for the revitalization of existing zones and development of new zones will be tendered to private developers and managers, using a PPP model2. The transactional entity or unit may also be empowered with special authorities, such as the authority to establish a one-stop-shop in zones whereby enterprises could obtain the authorizations and approvals necessary to construct and operate their businesses.The transaction advisor will be asked to confirm the most appropriate form for this entity or unit.

The transactional unit will have a small team responsible for tendering and managing the PPPs and will ultimately be sustained by the revenues generated from ongoing PPP operations, potentially including proceeds from the sale and leasing of land. The CEILD will help create and provide legal and technical support to the transactional unit. The currently anticipated timeline for creation of the unit, including any required decree authorizing public funding for the transactional unit, if required, is about six months.

For revitalized zones that have land that has been sold but is not utilized, the activity may also support the creation of an entity,most likely be structured as a Joint Stock Company (JSC), that will work with the transactional unit to incentivize land acquistion/transfers between private land owners who are not using their land and the JSC and eventually to enterprises seeking land for industrial use. The JSC would purchase land from existing owners in exchange for shares in the JSC, which would allow the land owners to participate as shareholders in the development of the revitalization and expansion of existing zones. The shareholders of the JSC would most likely include private landowners and other investors such as financial institutions holding liens or other interests in the land being provided. The transactionsal unit could then acquire land through the JSC and that land could be put out to market as part of a PPP. The transaction advisor will be asked to further investigate the viability of the JSC and present the results to the CEILD. With the approval of the CEILD, the consultant will be asked to create the JSC as an option to this contract.

Principles for Industrial Zone Models: Demonstration projects that will be supported by the Compact are expected to be consistent with international best practices in industrial zone development. Such practices include development and phasing per market demand requirements, a high performing organizational arrangement for development, management and maintenance of the zones and high quality infrastructure that meets the needs of enterprises, and compliance with the highest standards of environmental, social and gender performance. The demonstration zones are expected to comply with MCC’s Gender Policy and MCC’s Environmental Guidelines and the International Finance Corporation (IFC) Performance Standards and applicable Industry Specific Guidelines. In addition, demonstration projects should, take into account the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) recently developed a Guide for Sustainable Industrial Zones under its Program for Environment Protection, implemented by the Moroccan Ministry of Environment (MoE)3.

Social and business support services, such as transportation, enhanced security measures, gender-equitable training and recruitment services, common facilities for workers that promote safe and healthy working

2 For purposes of this TOR, the term PPP includes a public concession.

3 Guidelines are identified at this link: http://www.environnement.gov.ma/PDFs/GUIDE%20ORIENTATION%20TRANSITION%20DANS%20ZONES%20INDUSTRIELES%20DURABLES.pdf

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environment (e.g. restauration, child care, clinics etc), promotion of small and medium enterprises and gender-equitable service offerings (such as business incubators within industrial parks, loans available to women entrepreneurs etc.) should also be considered depending on demand and willingness to pay by enterprises.

III - Demonstration Sites

Demonstration sites have been selected for revitalization and development of new industrial zones based on a process using the following criteria:

Demand: Measured by location in an industrial region, and the importance of that region to industrial GDP in Morocco as well as evidence of demand in that region

Location: Evaluated by proximity of the site to transport, availability of labor, presence of nearby social infrastructure

Economic Impact: Measured by number of jobs expected to be created Financial Viability: Measured by amount of public support required and expected long run

profitability of the zone, as measured by Economic Rates of Return that must exceed 10% Available Industrial Land to be Developed: Amount of land available to be revitalized and/or

developed and the difficulty of accessing that land Stakeholder Engagement: Assessed by the existence of a dynamic industrial zone association and

commitment of local stakeholders (municipality, province, technical services) Infrastructure Requirements: Time and cost to develop required infrastructure Enviromental and Social Costs and Risks: Cost and difficulty of addressing environmental and social

needs and risks including minimizing displacement of local population.

Based on these criteria, the following sites were selected for further development by this transaction advisor. Further information on each of these sites is contained in the excerpts of the Deloitte deliverable, which will be provided to potential bidders upon request. The expectation is that not all of the sites would be prepared simultaneously, but that there would be some phasing, as laid out in the deliverable timeline.

Sites for Revitalization

1. Had Soualem: Had Soualem IZ is in a prime industrial area easily accessible from National Route 1 and the A5 highway, 30 km from Casablanca and 10km from the coast. The existing operational zone is 68.5 ha with an extension area of 57 ha, currently owned by a consortium of local communes. The Had Soualem IZ site development consists of two elements: rehabilitation of the existing IZ to upgrade existing infrastructure and incentivize the use of currently unused (unvalorized) plots, and the 57 ha expansion of the zone that will connect the existing Had Soualem IZ to a small existing Al Omrane IZ to the southeast. The revitalization of the existing IZ includes the rehabilitation of roads, sidewalks, and street lights, as well as water, sanitation, and public lighting networks. The extension of the IZ includes the provision of all infrastructure required to develop large- and medium-sized plots for industry. It also includes the construction of a 20 m long, 18 m wide, and 3 m high bridge.

2. Bouznika: Bouznika IZ is in a prime industrial area, 51 km from Casablanca, 36 km from Rabat and is easily accessible from National Route 1 and the A3 highway. The existing operational zone has an area of 31 ha with an extension area of 30.3 ha owned publicly and privately. The Bouznika IZ site development consists of two elements: rehabilitation of the existing IZ to upgrade existing infrastructure and incentivize the use of unvalorized plots, and expansion of the zone. The revitalization of the existing IZ includes the rehabilitation of an existing access point to the zone, roads and sidewalks, as well as water, sanitation, public lighting networks, and the burial of the high voltage aerial line that is crossing the zone. The extension of the IZ includes the provision of all

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infrastructure required to develop large- and medium-sized plots for industry. It also includes the building of a 100 m long, 16 m wide, and 6 m high bridge on the Oued Cherrat; a 15 m long, 16 m wide, and 3 m high bridge on the Oued Sikiouk (to connect the existing zone to the extension), and a dedicated Waste Water Treatment Plant.

Sites for New Zone Development

1. Ain Dalia : Ain Dalia IZ is in a high demand industrial area, 18 km from Tanger, 3 km from the city of Ain Dalia, adjacent to the village of Ain Dalia Lekbira, 15 km from the Tanger international airport, and is easily accessible from the A4 highway. The ONCF (national railway company) is also developing a train station and logistics area next to the site. The site is part of a 1200 ha project that will be implemented in phases and is located next to the high speed rail line. The section being considered by the GoM for development is 142.7 ha. However, the section being considered by MCC for the creation of a future IZ is limited to 48.5 ha gross as an initial phase.

2. Sahel Lakhyayta : Sahel Lakhyayta is located very close to the Had Soualem site, and has the possiblity of being packaged together with Had Soualem for development and management by one private partner. Initial demand analysis in this major industrial region suggests that there will be sufficient land uptake to make the development of both sites viable. The site is 250 ha of greenfield development of which 163 ha are planned for industrial use and 87 ha are planned for logistics. Only a portion of the area being considered for industrial use would be considered for investment by the compact. It is in an accessible location with connectivity to the A5 highway.

The Deloite deliverable, to be provided to potential bidders upon request, includes high-level site workplans proposed by Deloitte. The current plan for support to the sites, subject to review and input from the transaction advisor, is that the compact would finance direct infrastructure improvements, and to the extent necessary to make the transaction viable, provide viability gap financing. Infrastructure or other improvements financed directly by the Compact would be procured separately and would occur in parallel to the PPP transactions.

IV –Objectives of the Consultancy

The objectives of this consultancy are to advise MCA-Morocco and MICIEN on the feasibility, structuring, financial viability, promotion and closing of PPP transactions for four industrial zones in order to successfully attract private partners for zone development and management. This advice will balance the following considerations:

o GoM’s public policy objectives with respect to developing industrial land that meets the needs of enterprises with respect to location, price, types and quality of services provided and design and management of industrial zones

o GoM and MCC’s development objectives, with respect to demonstrating a new market-driven approach to developing and operating industrial zones in Morocco that are in line with MCC standards related to economic analysis and impact, environment, gender and social inclusion, infrastructure and sustainability

o Financial viability (e.g., hurdle rate) and other requirements that will attract high quality private investor partners to develop and manage industrial zones

The advice provided by this transaction advisor must be consistent with applicable Moroccan law and standards, including standards related to PPPs, environment and infrastructure, gender and social inclusion

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aspects and with relevant MCC standards, including economic, social, environmental and gender guidelines.4

The transaction advisor will provide technical assistance and support to a team designated by the CEILD and eventually the staff of the transactional unit. The transaction advisor will work closely with this team and should plan to schedule frequent and regular project meetings.

V – Scope of Services

Preparatory Tasks: As described above, this activity envisions the creation of both a transactional unit and, at the option of MCA-Morocco, a JSC, as part of the overall implementation structure for the demonstration sites. The transaction advisor should review the due diligence prepared by Deloitte, identify any gaps that need further assessment and develop a plan for the creation of the transactional unit. For the JSC, the transaction advisor will also review the due diligence, identify gaps that need further assessment and develop a recommendation on how to move forward with its creation. Specifically, additional market due diligence will likely be required with existing land owners, financial institutions, and investors to determine the level of interest and specific requirements for operationalizing the JSC. MCA-Morocco will review this assessment and then may choose to execute the option for creation of the JSC.

Once the plans for the transactional unit and possibly the JSC are approved by MCA-Morocco, in consultation with MCC and other GoM stakeholders, the transaction advisor will then execute the plan, with a target for completion in early 2017.

Revitalization Transactions: Market assessment and demand analyses, which included analysis of the high growth sectors in the geographic areas of the targeted zones (Had Soualem and Bouznika) and firm interviews to understand enterprise requirements, were completed by Deloitte. Deloitte also developed concept-level Master Plans, which provide general layouts and proposed on-site and off-site infrastructure development and rehabilitation as part of potential PPP investment packages. Cost estimates based on preliminary design, ratios, and unit costs from other projects were applied to gross estimates of outputs and quantities to arrive at these estimates– no topographic, hydrological or geotechnical studies were done, although limited soil and water quality sampling was carried out by Antea. As such, these cost estimates include a 50% contingency and some degree of uncertainty. Additional detail will be provided in the Deloitte site studies which may be provided on request.

The Transaction Advisor will review these studies, develop an analysis of the gaps in order to develop feasibility studies in line with the requirements laid out in Annex A and then proceed with the preparation of full PPP feasibility studies. Upon review and approval of the PPP feasibility studies by MCA-Morocco, the Transaction Advisor will be asked to structure, plan and oversee the tender of the PPP transaction and then support MCA-Morocco and the GoM in transaction closing and oversight.

In parallel, MCA-Morocco will separately procure services for detailed technical and environmental studies5 for all infrastructure and other works to be financed directly by the Compact or by the GoM (as opposed to infrastructure and other works to be funded and completed through the PPP), and for the completion of such “primer” infrastructure and works, to include off-site infrastructure and, for the existing sites, some improvements to the existing infrastructure in the site. This will include detailed technical studies, including topographic, hydrological and geotechnical studies as well as the

4 MCC Environmental Guidelines are available on the MCC website at https://www.mcc.gov/resources/doc/environmental-guidelines; the Gender Policy may be found at https://assets.mcc.gov/guidance/mcc-policy-gender.pdf5 The rehabilitation component of the project is classified « category A » according to MCC environmental guidelines

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Environmental and Social Impact Assessments (ESIA) and the Resettlement Action Plan (RAP). The ESIA will assess environmental mitigation measures needed to operate existing industries in accordance with national and international standards as well as other environmental and social issues associated with the development of the sites including resettlement. The ESIAs will develop environmental and social baseline information for all sites and evaluate potential impacts to biodiversity, aquatic and terrestrial ecology, land use and other environmental issues specific to the sites. ESIAs will also include Environmental and Social Management Plans which will provide detailed recommendations moving forward to manage the sites in accordance with international standards and Resettlement Action Plans detailing appropriate measures for the compensation and relocation of those affected by the development of the site.

The Transaction Advisor will be asked to provide input into the ToR procuring this above mentioned technical and environmental firm based on initial validation of existing studies and the transaction advisors own initial assessment. The TA will then also review the technical and environmental studies and use them as input to the PPP feasibility studies and the bidding documents for the PPP. Finally, the TA will also work with the technical and environmental firm to make the final decision on which elements of infrastructure will be directly will be financed directly by the Compact and whether viability gap financing may be required.

New Zone Transactions: Preliminary market analysis and some site scoping has been completed for each of the new development sites (Sahel Lakhyayta & Ain Dalia). For each of these sites, the Transaction Advisor will also carry out a full PPP feasibility study (per Annex A) that will refine and confirm the project definition, based on site-specific technical studies, a financial feasibility assessment and a risk allocation plan. These PPP feasibility studies will also indicate whether any of the infrastructure and other works to be done as part of the development of these sites are best funded by the Compact or the GoM and should be tendered prior to or in parallel with the PPP transaction or should be included as part of the PPP’s obligation. Upon review and approval of the PPP feasibility studies by MCA-Morocco, the Transaction Advisor will be asked to structure, plan and oversee the tender of the PPP and then support MCA-Morocco and the GoM in transaction closing and oversight.

As with the revitalized sites, MCA-Morocco will separately procure services for detailed technical and environmental studies for any infrastructure or other works to be funded directly by the Compact and for completion of such infrastructure and works.

PPP Transaction:The consultant will be expected to lead and oversee the following:

Preparation of all PPP Bidding Documents Oversight of PPP Negotiations and Transaction Closure Oversight of Transaction after Closure up through the End Date of the Compact

Background on each of the sites is available on request, and detailed requirements for studies and other deliverables are described in the deliverables section (Section VII) below and Annexes A.

VI – Tasks

The transaction advisor is expected to complete the following tasks with respect to each of the demonstration sites. However, should the feasiblity study reveal a fatal flaw during task 3, or should MCA-Morocco determine that a site is no longer viable for any reason, or if the procurement process fails to result in a partner acceptable to MCA-Morocco in phase 4, MCA-Morocco reserves the right to terminate services related to a particular site at any time. Upon termination of services for a particular site, the transaction advisor will not be required to perform the services defined in the subsequent phases and

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will not be entitled to payment for these services. Some of the criteria that will be considered in the viability of a site include:

PPP transaction and any financial expenditures that would be required from MCA-Morocco cannot be completed within the five year period of the compact

Public contribution is significantly higher than the ratios identified in the intial due diligence completed on the sites, and budgeted for in the activity budget

Environmental, social or technical fatal flaws are identified which are beyond the time, financial resources or management capacity available under the compact

Information that signficiantly changes the assessment of any of the criteria for the demonstration sites, laid out in section III

Task 1: Mobilization and Initial Workplan. The transaction advisor will review the work done to date on the Industrial Activity, including all work completed by the GoM, MCC and their consultants. The Transaction Advisor will also develop a workplan, to be approved by MCA-Morocco, for each of the subsequent tasks.

Task 2 : Support for the creation of the transactional unit and Joint Stock Company

The transaction advisor will support the MCA-Maroc in the creation of a transactional unit or units to cover the geographic areas of the demonstration sites and also assess the potential viability of the JSC and, if determined by MCA-Morocco to be viable, proceed with creation of the JSC.

For the transactional unit, the transaction advisor will:

With regards to the recommendations of the previous studies, assess the opportunity of the creation of a transactional unit. If the option for the transactional unit establishment is confirmed, identify any legal and operational obstacles to implementation of those recommendations, and will propose solutions to address these obstacles,

Prepare a detailed business plan, including both a narrative and a financial model (in Excel format), for each transactional unit. The business plan must take into consideration the projects to be managed by the transactional unit and the expected costs and revenues for those projects; the business plan should also consider the viability of the transactional unit continuing independently with non-compact funded transactions after completion of the compact funded transactions

Prepare and manage an outreach plan for potential shareholders of the transactional unit, Prepare the governing documents of the transactional unit as well as operating manuals, including

financial management, operational and technical aspects, administration, ethics and others as recommended by the transaction advisor. This includes establishing the authorities, roles and responsibilities and communication protocol among the transactional unit and CEILD.

Prepare legal documents necessary for the creation of the transactional unit(such as statutes, bylaws, shareholder subscription forms) and ensure their adoption and endorsement by the shareholders of the transactional unit,

Organize and facilitate meetings required for the establishment of the transactional unit, Perform all legal and administrative operations necessary for the creation of the transactional unit, Provide MCA-Morocco and the GoM with all the legal and administrative documents verifying

the legal creation of the transactional unit.

For the JSC, the transaction advisor will:

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Assess the viability of the recommendations of previous studies with respect to the legal and organizational form of the JSC and identify legal and operational obstacles to implementation of those recommendations

Assess the viability of the JSC from a market perspective (undertake further outreach to land owners, financial institutions, and investors) to understand likely demand and how best to structure the entity to make it most attractive to potential investors

Provide a recommendation to MCA-Morocco on whether and how to move forward with the JSC as well as a concrete plan and recommendations on how to address any identified gaps or obstacles.

Optional Task 2(a): At its discretion, MCA-Morocco may exercise the option for the transaction advisor to:

Prepare the governing documents of the JSC as well as operating manuals, including financial management, operational and technical aspects, administration, ethics and others as recommended by the transaction advisor. This includes establishing the authorities, roles and responsibilities and communication protocol of the JSC with respect to the transactional unit and CEILD

Prepare legal documents necessary for the creation of the JSC (such as statutes, bylaws, and shareholder subscription forms) and ensure their acceptance by the shareholders of the JSC,

Organize and facilitate meetings required for the establishment of the JSC, Perform all legal and administrative operations necessary for the creation of the JSC, Provide MCA-Morocco and the GoM with all the legal and administrative documents verifying

the legal creation of the JSC, Prepare a detailed business plan, including both a narrative and a financial model (in Excel

format). The business plan must take into consideration the projects to be managed by the JSC and the expected costs and revenues for those projects,

Develop a staffing plan, including the number of staff required, roles and responsibilities, as well as position descriptions

Develop the workplan for the JSC, to include administrative and operational start-up and JSC operations,

As required, work with MCA-Morocco to provide oversight to the operations of the JSC.

Task 3 : PPP Feasibility Studies

The transaction advisor will undertake the feasibility studies in two phases:

Phase I: As a first step, the transaction advisor will do a comprehensive site review and prepare a plan for development of PPP feasibility studies for each of the sites. The review and plan will be based on all existing due diligence on technical, geo-technical, financial, gender, social, environmental and legal issues related to the selected sites and will include a detailed analysis of the existing studies, identification of possible risks and challenges and a detailed recommendations to address these issues.

Based on the results of this initial study, should a site be demonstrated to be unviable, MCA-Morocco also reserves the right to substitute a site identified in these terms of reference with another industrial site requiring a similar level of effort. Should that industrial site not be of comparable size or scope, Level of Effort will be negotated with the transaction advisor.

Phase II: Once the plan for development of the PPP feasibility study is approved by MCA-Morocco, the transaction advisor will prepare a study for each of the identified sites. The PPP study shall include identification / analysis of key technical, geo-technical, environmental, social and gender, financial and legal risks, recommended mitigation measures and the steps, including all key legal steps, required GoM approvals, or other preparations, necessary for the successful tendering and closing of the PPP transaction.

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As outlined in the scope of services section, the transaction advisor will also be coordinating closely with the technical and environmental firm on the environmental and technical studies to incorporate information from those studies into the feasibility study and to identify which elements of the sites will be directly financed by the compact.

The results of the feasibility study will be presented to MCA-Morocco, and must be in the form of a detailed narrative report and a Power Point presentation to be delivered at a dedicated meeting.The outline of the feasibility study is provided in Annex A. The transaction advisor will begin with the two new sites and complete the full feasibility studies before moving to the revitalized sites and beginning studies on those sites.

Task 4 : PPP Transaction Execution 

After the approval of the feasiblity study by MCA-Morocco, the transaction advisor will be asked to prepare and execute a PPP transaction for each of the proposed sites. The process will include the following steps.

Preparation of a plan for the transaction:o Present the final risk allocation structure for each PPP project as well as the timeline for

execution of the transaction,o Prepare selection criteria and a bid evaluation guide that addresses the technical, financial,

enviromental, gender and social inclusion aspects of the project;o Recommend a transaction structure, including enforcement mechanisms, to ensure

compliance with the PPP contract.o Develop a long list of potential developers/operators in Morocco, the region, and further

abroad for targeting for expression of interest (EOI) submission;

Solicit and screen potential bidders:o Prepare a communication and marketing plan for each PPP, taking into consideration the

desire to successfully tender PPP transactions for all sites during the term of the Compact;o Implement the communication plan for expressions of interest for each project in order to

maximize the number of national and international private operators participating;o Prepare and circulate the text of the call for EOI;o Prepare an information memorandum on each PPP project and present it to potential private

investors at an introductory meeting;o If deemed necessary by MCA-Morocco, prepare a virtual data room;o Oversee implementation of the EOI process;o Support the selection committee in evaluating the EOIs.

Prepare bidding documents and launch and oversee the tender:o Prepare and monitor the publication of information to the bidders;o Prepare and publish the text of the call for tenders;o Inform and invite bidders to submit their bids in response to the tender;o Provide all required information to potential bidders and, as appropriate, organize site visits

for such bidders;o Prepare answers to questions raised by bidders, and generally create a transparent

environment for bidders to conduct due diligence and prepare high quality offers;o Organize the reception of technical and financial offers and package and deliver the final bid

documents to the selection committee for evaluation.

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Support the selection committee in assessing the tenders:o Manage the PPP selection process by assisting MCA-Morocco and relevant GoM

stakeholders in forming a PPP selection committee and then organizing and overseeing the committee’s selection process for evaluation and selection of the best offer according to applicable financial, technical, environmental-social and legal evaluation criteria;

o Assess, pressure-test, and revise bidder financial models/business plans to evaluate the economic terms and technical assumptions of the proposals, including capital investments, operations costs, financing plan and implied market prices;

o Prepare and monitor the communication regarding the selection of the private partner.

Support for the negotiation and closure of the PPP contracts between the transactional unit and the private partners:

o Support the transactional unit in the negotiation, preparation and signing of the PPP contract;o Assist the transactional unit and MCA-Morocco to work with the project sponsors and lenders

by providing relevant information, documents and other steps necessary to close financing for the project;

o Monitor financial closure of the PPP transaction.

Task 5 : Monitoring of PPP post-award

The transaction advisor will establish a plan for monitoring the execution of the PPP contract and reinforcing the work of the transactional unit and CEILD in overseeing the PPP. The monitoring plan, including but not limited to identification of relevant indicators, frequency of reporting, and data quality reviews, should be developed in collaboration with the Monitoring & Evaluation (M&E) personnel from MCA-Morocco and should comply with relevant MCC M&E guidelines. The specific tasks include:

Definition of indicators to monitor contract compliance and project implementation and performance with respect to timing, direct and indirect investment, employment, utilization of land, compliance with applicable environmental, gender and social inclusion standards and targets, and other outputs and outcomes of interest. These indicators should be organized in the form of an electronic dashboard that is easily utilized by the transactional unit and that is integrated with MCA-Morocco’s M&E Plan and associated IT and reporting systems.

The definition and establishment of a periodic reporting mechanism by the private partner to allow updating of the dashboard at pre-defined dates.

The definition and establishment of a mechanism to ensure the accuracy of the information reported by the private partner

A plan to provide support and on the job training, as required, to the transactional unit and MICIEN to ensure that proper oversight is being conducted.

MCA-Morocco expects that close oversight and support would be required for a period of about a year after the completion of the transaction, with more limited oversight and support in place for the remainder of the compact period as the transactional unit capacity and familiarity with the PPP is built up.

VII: Deliverables

The deliverable schedule is built out from the project start date, which is the date of award.

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All reports and plans assume a two week review and approval by MCA-Morocco. In the event that MCA-Morocco is delayed in issuing its approval due to reasons beyond the Transaction Advisor’s control, the schedule will be reviewed and possibly revised.

Task 1: Mobilization and Initial Workplan

Deliverable Due Date (Months)

Mobilization of team and development of overall contract workplan T+0.5

Task 2: Support for the creation of the Transactional Unit and JSC

Deliverable Due Date (Months)

Metholodolgical Report detailing the approach and the method and schedule for completion of the task. The report should also demonstrate the level of understanding by the Transaction advisor of the project and the tasks (Including coordination with technical and environmental consultant).

T+1

Analytical Report of existing studies T+1.5Detailed report presenting a plan for the organizational structure of the Transactional Unit and JSC, detailed business plan, financial models and associated governance documents. This report should also include also the legal documents to be used in the creation of the transactional unit and, if applicable SPA

T+2.5

The legal and administrative documents creating the Transactional Unit T+5The legal and administrative documents creating the JSC, should the option to do so be exercised T+7

Task 3 : PPP Feasibility Study

Deadlines under task 2 and 3 will need to be closely coordianated with the technical and environmental firms mentioned earlier in this ToR. This schedule will be subject to revision should it be required based on that coordination or the overall timeline of the project.

Site 1

Deliverable Due Date (Months)

Phase I Site Assessment with detailed workplan T+1.5Draft PPP Feasibility Study T+3Final PPP Feasibility Study T+4

Site 2

Deliverable Due Date (Months)

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Phase I Site Assessment with detailed workplan T+1.5Draft PPP Feasibility Study T+3Final PPP Feasibility Study T+4

Site 3

Deliverable Due Date (Months)

Phase I Site Assessment with detailed workplan T+6Draft PPP Feasibility Study T+8Final PPP Feasibility Study T+9

Site 4

Deliverable Due Date (Months)

Phase I Site Assessment with detailed workplan T+6Draft PPP Feasibility Study T+8Final PPP Feasibility Study T+9

Feasbility Study

The feasibility study must cover all the requested elements laid out in Annex A for each site. The report should be in Word format in electronic format and 20 paper copies.

All of the financial models should be presented in Excel format. They should clearly lay out the assumptions and include a sensitivity analysis with the results of this analysis. They should also be easy to use and adaptable so that they may be adjusted in the future as ncessary. The feasibility study should be accompanied by an executive summary and a PowerPoint presentation covering the results of the study.

Task 4   :   PPP Transaction and Monitoring

Site 1

Deliverable Due Date (Months)

Final report on deal structure/transaction model, including risk allocation T+6Communication Plan T+6Information memo, plan and package for the Expression of Interest T+7.5Report on the execution of the communication plan T+9Report on evaluation and pre-qualification T+10Plan for PPP tender and bidding documents T+10Report on evaluation of submissions T+14Draft of PPP contract, execution and negotiation plan T+15Report on execution of negotiations T+16Signed PPP Contract T+17Final report on the execution of the transaction T+18

Site 2

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Deliverable Due Date (Months)

Final report on deal structure/transaction model, including risk allocation T+6Communication Plan T+6Information memo, plan and package for the Expression of Interest T+7.5Report on the execution of the communication plan T+9Report on evaluation and pre-qualification T+10Plan for PPP tender and bidding documents T+10Report on evaluation of submissions T+14Draft of PPP contract, execution and negotiation plan T+15Report on execution of negotiations T+16Signed PPP Contract T+17Final report on the execution of the transaction T+18

Site 3

Deliverable Due Date (Months)

Final report on the deal structure/transaction model, including risk allocation

T+11

Communication Plan T+11Information Memorandum, plan and package for the Expression of Interest

T+12.5

Report on the execution of the communication plan T+14Report on evaluation and pre-qualification T+15Plan for PPP tender and bidding documents T+15Report on evaluation of submissions T+19Draft of PPP contract, execution and negotiation plan T+20Report on execution of negotiations T+21PPP contract signature T+22Final report summarizing the transaction operation T+23

Site 4

Deliverable Due Date (Months)

Final report on the deal structure/transaction model, including risk allocation

T+11

Communication Plan T+11Information Memorandum, plan and package for the Expression of Interest

T+12.5

Report on the execution of the communication plan T+14Report on evaluation and pre-qualification T+15Plan for PPP tender and bidding documents T+15Report on evaluation of submissions T+19Draft of PPP contract, execution and negotiation plan T+20Report on execution of negotiations T+21PPP contract signature T+22

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Final report summarizing the transaction operation T+23

Task 5   : Post-contract monitoring

Task 5 is timed so that the oversight is in place by the time the first PPP contract is signed. If the schedule for the PPPs changes, this schedule will be reviewed.

Deliverable Due Date (Months)

Metholdology Report and Workplan T+13Dashboard for monitoring performance indicators T+15Protocol for information exchange and updating of indicators T+15Plan for oversight T+15Quarterly report on oversight End of each

quarter

VIII - Qualifications of Key Personnel

The transaction advisor will provide an interdisciplinary team of experts with the necessary education, skill and experience (as indicated by their submitted CVs) required for all aspects of the assignment. The team is expected to include, at a minimum, the expertise and key personnel described below. It is acceptable for one individual to cover multiple areas of expertise below as long as they meet the required qualifications. The transaction advisor is also free to supplement the key personnel with additional staff as necessary to complete the tasks laid out in this assignment. French language proficiency is required for all staff, unless otherwise approved by MCA-Morocco. Experience in developing countries, and specifically in Morocco, is highly desired, but not required.

The transaction advisor shall propose a methodolgy and approach to ensure that all tasks are executed in line with the requirements of the project, including provisions for the key team members, particularly the team leader, to spend considerable time in Morocco.

Expert Required Qualifications

Project Director

Key Personnel

Advanced degree in economics, business, law or related field with minimum experience of 10 years in project management and the development of infrastructure projects utilizing PPPs, with experience in industrial zone PPPs preferred. Demonstrated abilities in project management, risk management and negotiation.

PPP Expert

Key Personnel

Advanced degree in economics, business, law or related field with a minimum experience of 8 years in the development of infrastructure projects utilizing PPPs, with experience in industrial zone PPPs preferred. Demonstrated abilities in project management, risk management and negotiation.

Financial Expert

Key Personnel

Advanced degree in business or finance with a minimum of five years of experience with financing of PPP projects, preferably in industrial zones, as well as preparation of

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financial models and risk analysis.

Industrial Zone Infrastructure Expert

Advanced degree in civil engineering with approximatley 10 years of experience in the development of industrial zone projects ; experience with PPPs in industrial zones preferred.

Social and Environmental Expert

Advanced degree in Environmental management or Environmental Engineering and/or Social Sciences with a minimum of 10 years of experience in environmental and social assessment for infrastructure projects, preferably including industrial zones. Must be familiar with environmental and social standards of the IFC.

Gender and Social Inclusion Expert

Advanced degree in Social Sciences and/or Gender Studies with a minimum of 7 years of’ experience designing and implementing gender and social inclusion interventions in large development projects, preferably in infrastructure and workforce development programs. Some knowledge and experience working in industrial zones is a plus.

PPP Procurement ExpertAdvanced degree with at least 8 years of experience in procurement processes and tenders, including for at least two PPPs, preferably for industrial zones.

Communication Expert

Master in Communication or Marketing with a minimum of 8 years’ experience in the management of communication for investment in infrastructure PPP projects, preferably for industrial zones.

Legal Expert

Advanced law degree with at least 10 years of experience in contract preparation, negotiation and contracting of PPP infrastructure projects, preferably for industrial zones. Strong knowledge of Moroccan law related to real estate and property rights as well as PPPs with at least 5 years of experience working in the legal sector in Morocco.

IX - Payments

The financial proposal submitted should consist of a price for provision of the services for each task in this requirement. The lump sum price shall cover services and deliverables to be provided by the transaction advisor for tasks one through five, with an optional amount for task 2(a).

Contract Payments will be deliverables based, based on the following tasks:

Task AmountTask 1: Mobilization and Initial Workplan M1Task 2: Support for the creation of the Transactional Unit and JSC M2 and M2 Option

(for creation of JSC)

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Task 3: PPP Feasibility Studies M3Task 4: PPP Transaction Execution M4Task 5: Monitoring of PPP post-award M5

The fee will be structured in two parts. The first will be the lump sum fees laid out above, released against the milestones laid out below. The second will be a success fee equal to a percentage of the fully funded capital investment committed to by the private partner in the first phase of development, as set forth in the PPP transaction documents, payable upon financial close of each PPP transaction. The percentage will be set on a sliding scale equal to 2% of the first $5 million of capital investment, 1.5% for $5 million to $10 million and 1% above $10 million.

The payments will be laid out as follows. Payments under all tasks must be accepted by MCA-Morocco prior to any payment becoming due.

Task 1: Mobilization and Initial Workplan: Amount M1 would be paid upon mobilization of the consultant, high-level review of all existing work and a general workplan for all tasks submitted and accepted by MCA-Morocco.

Task 2: Support for the creation of the Transactional Unit and JSC

Deliverable AmountDetailed workplan  M2*0,1Analytical report of existing work M2*0,3Detailed report laying out the the components and summarizing work completed in fulfillment of Task 2

M2*0,3

Legal and operational documentsfor Transactional Unit M2*0,3Legal and operational documents for JSC M2 Option

Task 3: PPP Feasibilty Studies

Site 1

Deliverable AmountPhase I Site Assessment with workplan (M3*0,3)*1/4Draft Feasibility Study (M3*0,2)*1/4Final feasibility study (M3*0,5)*1/4

Site 2

Deliverable MontantPhase I Site Assessment with workplan (M3*0,3)*1/4Draft Feasibility Study (M3*0,2)*1/4Final feasibility study (M3*0,5)*1/4

Site 3

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Deliverable AmountPhase I Site Assessment with workplan (M3*0,3)*1/4Draft Feasibility Study (M3*0,2)*1/4Final feasibility study (M3*0,5)*1/4

Site 4

Deliverable AmountPhase I Site Assessment with workplan (M3*0,3)*1/4Draft Feasibility Study (M3*0,2)*1/4Final feasibility study (M3*0,5)*1/4

Task 4   : PPP Transaction Execution

Site 1

Deliverable AmountFinal report on deal structure/transaction model, including risk allocation (M4*0,20)*1/4Communication Plan (M4*0,05)*1/4Information memo, plan and package for the Expression of Interest (M4*0,05)*1/4Report on the execution of the communication plan (M4*0,05)*1/4Report on evaluation and pre-qualification (M4*0,05)*1/4Plan for PPP tender and bidding documents (M4*0,05)*1/4Report on evaluation of submissions (M4*0,05)*1/4Draft of PPP contract, execution and negotiation plan (M4*0,05)*1/4Report on execution of negotiations (M4*0,05)*1/4Signed PPP Contract (M4*0,35)*1/4Final report on the execution of the transaction (M4*0,05)*1/4

Site 2

Deliverable AmountFinal report on deal structure/transaction model, including risk allocation (M4*0,20)*1/4Communication Plan (M4*0,05)*1/4Information memo, plan and package for the Expression of Interest (M4*0,05)*1/4Report on the execution of the communication plan (M4*0,05)*1/4Report on evaluation and pre-qualification (M4*0,05)*1/4Plan for PPP tender and bidding documents (M4*0,05)*1/4Report on evaluation of submissions (M4*0,05)*1/4Draft of PPP contract, execution and negotiation plan (M4*0,05)*1/4Report on execution of negotiations (M4*0,05)*1/4Signed PPP Contract (M4*0,35)*1/4Final report on the execution of the transaction (M4*0,05)*1/4

Site 3

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Deliverable AmountFinal report on deal structure/transaction model, including risk allocation (M4*0,20)*1/4Communication Plan (M4*0,05)*1/4Information memo, plan and package for the Expression of Interest (M4*0,05)*1/4Report on the execution of the communication plan (M4*0,05)*1/4Report on evaluation and pre-qualification (M4*0,05)*1/4Plan for PPP tender and bidding documents (M4*0,05)*1/4Report on evaluation of submissions (M4*0,05)*1/4Draft of PPP contract, execution and negotiation plan (M4*0,05)*1/4Report on execution of negotiations (M4*0,05)*1/4Signed PPP Contract (M4*0,35)*1/4Final report on the execution of the transaction (M4*0,05)*1/4

Site 4

Deliverable AmountFinal report on deal structure/transaction model, including risk allocation (M4*0,20)*1/4Communication Plan (M4*0,05)*1/4Information memo, plan and package for the Expression of Interest (M4*0,05)*1/4Report on the execution of the communication plan (M4*0,05)*1/4Report on evaluation and pre-qualification (M4*0,05)*1/4Plan for PPP tender and bidding documents (M4*0,05)*1/4Report on evaluation of submissions (M4*0,05)*1/4Draft of PPP contract, execution and negotiation plan (M4*0,05)*1/4Report on execution of negotiations (M4*0,05)*1/4Signed PPP Contract (M4*0,35)*1/4Final report on the execution of the transaction (M4*0,05)*1/4

Task 5: Monitoring of PPP Post-Award

Deliverable AmountWorkplan M5*0,1Dashboard for monitoring performance indicatorsProcedures for contract oversight and updating of indicatorsPlan to provide support and technical assistance to transactional unit staff to ensure appropriate oversight

M5*0,2

A quarterly report providing updates on the execution of the monitoring of the PPP post-award.

M5*0,7 (divided by number of quarters in oversight period)

X –Selection Criteria

Evaluation Criteria for Technical Proposals

Criteria and sub-criteria Points

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1. Organizational Capacity 30

Organizational capacity and experience with the execution of similar projects, notably PPPs for industrial zones Organizational capacity and experience in performing similar studies ,

including the nature and value of the relevant contracts and ongoing tasks6

Experience as a leader in the execution of at least 5 projects of similar nature and complexity in the area of land in the five (5) years.

Past performance in implementing contracts under financing of international organizations such as MCC, USAID, World Bank.

The size and number of successful PPP projects in industrial zones internationally,

Experience in the field of industrial land in the MENA region2. Approach, methodology and workplan 30

Technical approach and methodology proposed : Understanding of the terms of reference and relevance of the approach for the completion of deliverables and objectives of the service

Quality of the proposed methodology to carry out the various phases of the PPP projects including post contractual phase.

Quality of the proposed approach to minimize risk to the public part and maximize private investment in pilot projects.

Quality of approach to ensure its duplication beyond the compact period.

Quality of the method proposed to ensure proper consideration of environmental, social and gender aspects.

Proposed workplan3. Qualifications of Key Personnel and Team Composition 40

Key Personnel :

Project DirectorPPP ExpertFinancial ExpertThe three key personnel listed above, as well as all other proposedmembers of the team, will each be evaluated on the extent to which he/she meets and exceeds the requirements established in the Terms of Reference and the extent to which the qualifications of each individual satisfies the job description defined in the methodology and reflects an understanding of the services required. The evaluation will be based upon the information set out in the CV for each of the individuals proposed as members of the team(which shall include explicit signed consent of each individual)and upon information from references for each individual proposed. The GoM reserves the right to contact the references in the CV as well as other sources to check references and past performance.

Total Points for All Criteria 100

6 Insert link to MCC SBDs

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Minimum required score for the technical proposal 80 points

IAC 5.7 The formula used to determine the financial scores is :

The formula for determining the financial scores is the following:Sf = 100 x Fm / F, in which Sf is the financial score, Fm is thelowest price and F the price of the Proposal under consideration.

The weights given to the Technical and Financial proposals are :

T = 80% and F = 20%.

XI –Resources Available on Request

Upon request, the following will be available:

Background due diligence on the transactional unit, identified as an SPV in the background materials, and JSC

Existing market and technical due diligence on proposed industrial sites

XII - Resources Available to the Winning Firm

Upon signing of the contract, the GoM will provide all additional relevant documentation, including consulting firm reports and other documents developed in the design of Compact project.

The Government reserves the right not to communicate, consultant, confidential or sensitive documents.

The transaction advisor shall not, under any circumstances, claim inability to conduct one of the tasks in the terms of reference, due to inability to access documents that are confidential or sensitive nature.

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Annexes

Annex A –Feasibility Study Outline

The feasability study will incorporate inputs from existing due dilignece work and studies done by MCC and the GoM, as well as inputs from studies to be done by environmental and other technical consultants hired by MCA-Morocco during the course of the compact.

I. Technical Feasibility

a) Demand Analysis: The transaction advisor can capitalize on the existing studies on the sites and any demand studies that have been done to date. The objective of this stage is to evaluate the level of existing and projected demand levels, as well as the overall level of demand risk facing the project, especially in light of market conditions and other industrial land/zone supply potentially coming online, and a recommendation on how demand risk should be allocated within the PPP structure. Specifically this analysis will include :

Amount of land to be provided at each of the IZ project locations to establish a plasing plan for land development and release, as well as options on land for subsequent development

Analysis of the demand for enterprise services, including those that provide specific benefits for women and youth: The transaction advisor will build on the existing studies to better understand the demand for these services, including security, transport, restaurants, daycare centers, incubator for SMEs, a separate window within the guichet unique etc, and the options for financing the provision of these services

b) Evaluation of Technical Options for the Project: The transaction advisor will identify, describe and analyze the different technical alternatives and options for implementing the project and will also recommend the optimal solutions which balance technical performance while limiting risks and costs. The transaction advisor will also recommend how techical risks (design, performance, planning, resources and inputs) should be allocated within a PPP structure.

c) Proposed Required Output Service Standards, including but not limited to: a. Definition of services: Clear definition of services to be offered to enterprises by the park

developer and manager for the industrial zone, including but not limited to services of the guichet unique with possibly a separate window for SMEs social services that enhance empolyee saftey and wellbeing, as well as business services for all enterprises, including SMEs that will maximize marketability of the zone,

b. Zone development: Targets for usable areas, as well as valorization in the zones for each year, with a minimum target of 80% by the 10th year after completion of the zone

c. Duration: The term of the PPP contract, deadlines for completion of zone development and plan for post-PPP operations and maintenance, including potential for PPP renewal

d. Technical, social, gender and environmental quality standards:i. Identification of gender, social, environmental, health and safety issues and

incorporation of those issues into the minimum techncial requriements and design parameters of the PPP, in line with the IFC standards which are required for MCC7.

7http://www.ifc.org/wps/wcm/connect/38fb14804a58c83480548f8969adcc27/PS_French_2012_Full- Document.pdf?MOD=AJPERES)

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ii. Required infrastructure engineering standards, with draft output-based specifications and performance requirements, and reference design for construction with whole-of-life project costs

iii. Standards for operations and maintenance: The specific standards for operations and maintenance of zone and the required state of these facilities at the time of transfer at the end of the PPP contract

II. Financial Feasibility

a) Financial Spreadsheet Model: The transaction advisor should prepare a well-labeled, organized, robust, flexible and user-friendly financial model for PPPs for each of the selected zones. The model should be in Excel, unless otherwise agreed with CEILD. This model should contain:

Schematic diagram of how all of the financial model’s worksheets are linked Assumptions and Results worksheet Demand Analysis worksheet Capital Investment Worksheet (including periodic renewal and replacements) Financing Worksheet (including likely sources, terms, and tenors of PPP financing) Income Statement Worksheet Projected Balance Sheet Worksheet Cash Flow Worksheet Sources and Uses of Funds Worksheet Sensitivity Analysis of key input risks Analysis of the impact of prices and service fees of the enterprises occupying the zones Affordability analysis for any Government performance guarantee, if applicable. Public Sector Comparator (PSC) and Value for Money (VfM) Analysis (if a viable public

sector option exists and required, relevant historic public sector data is available) Graphical depictions. Graphs should be produced to provide presentations of key results,

including sensitivity analyses Additional Worksheets to this PPP financial model may be needed for:

o Projected Revenues o Project operating and maintenance, and other costs o Depreciation Schedules

b) Description of the financial analysis, results and key issues:This section sould contain the following elements:

Projected Capital Expenditureso Land aquisitiono On-site and off-site civil works and site preparationo Construction of buildings, where appropriateo Machinery and equipmento Working capital fee and start-up costso Periodic renewals and asset replacement costs, as appropriateo Other capital investments as required

Projected Revenueso Projection of percentage of lots and revenues from sales and leaseso Projected sales prices for lots being soldo Projected rental rates for lots being rented

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o Projected fees to be collected from enterprises Projected Expenditures

o Operations of the zoneo Maintenace and reinvestment in infrastructure

Estimated (required) capital structure for the projecto Equityo Debto Guaranteeso Grants, public contributions and other relevant sources of investment

Financial Resultso Estimated internal rate of return on equity (IRR Equity)o Estimated debt service coverage ratio (DSCR)o Estimated discount rate, net present value (NPV), break-even period

Financial Riskso Inflationo Currencyo Interest rateo Other relevant financial risks

III. Legal and Institutional Due Diligence: The transaction advisor will assess the previous work, identify any shortcomings or gaps, and make recommendations to address these issues. This assessment will cover work related to:

PPP regulations and laws related to concessions Procurement regulations related to the PPP transaction Environmental laws related to industrial zone development and operations Labor laws related to industrial zone workforce Investment and tax laws related to industrial zone development and management and enterprise

operations within the zone Other legal and regulatory risks as relevant Identification of institutional gaps, between the MICIEN, transactional unit and MCA-Morocco,

for the purposes of monitoring and regulating the PPP

IV. Public Sector Comparator and Value for Money (VfM) Analysis

Capitalizing on existing studies, develop the following analyses :

Determine applicability of the PSC and VfM analysis

a) Estimate public sector capital expenditures, including development and revitalization costss and other contributions

b) Proposed adjustments related to :

Cost of Capital Risk Other adjustments

Proposal of conclusions and recommendations (quantitative and qualitative) for the analysis of the cost advantage

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V. Recommended PPP Risk-Allocation Structure

Provide recommendations to the GoM on :

a) The recommended PPP model for each zone to be developed or revitalized and the detailed risk allocation structure between the public and private partners

b) Public sector support and risk sharing : nature, size, form and timing of any public sector supports, contributions and contingent liabilities and assessment for why they are required for the PPP to be viable; this includes a detailed plan and budget for viability gap financing that is expected to be provided into the transaction by the compact and infrastructure that will be financed by the compact. The plan for any viability gap financing should include a clear explanation of (a) what the use of those funds should be (b) how it will be expended in five years and (c) how the payments to the private party should flow. The plan for infrastructure to be constructed will lay out what infrastructure will be constructed, the timeline and cost, and be laid out in the context of the overall plan for the transaction. All of this work will be closely coordinated with and incorporate the input of the techncial and environmental consutlants hired under the compact.

c) Affordability analysis: This analysis will capitalize on the demand studies and sensitivity testing and take into account the price that the end users are willing to pay and accordingly adjust the nature and size of the contribution of the public part .

VI. Proposed plan for PPP Tendering and Procurement

a) Identification and description of key reforms and other preparations required prior to tendering

b) Recommended terms

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